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Shopify Earnings Blow Past Forecasts as Revenue Tops $1 Billion

Shopify reports second-quarter earnings that blow past analysts' forecasts on surging demand for its e-commerce software platform and services.

Shopify  (SHOP) - Get Shopify, Inc. Class A Report on Wednesday reported second-quarter earnings that blew past analysts' forecasts and revenue that topped $1 billion for the first time as ongoing post-pandemic online shopping demand continued to drive demand for the company's e-commerce software platform and services.

Ottawa-based Shopify posted adjusted income of $284.6 million, or $2.24 a share, in the second quarter, vs. $129.3 million, or $1.05 a share, in the year-ago period. Analysts polled by FactSet had been expecting earnings of 97 cents a share.

Revenue was $1.12 billion in the quarter, up 57% from a year ago and in line with analysts' forecasts of $1.1 million.

Operating income was $139.4 million, or 12% of revenue, vs. income of $300,000 for the comparable period a year ago.

“Shopify fired on all cylinders in our second quarter, keeping our merchants well equipped to seize the opportunities presented in a post-pandemic retail era,” said Amy Shapero, Shopify’s chief financial officer. “As consumer spending remained strong, our merchants thrived and extracted more value from our platform, contributing to our rapid growth.”

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Subscription solutions revenue was $334.2 million, up 70% year over year, primarily due to more merchants joining the platform, Shopify said. Merchant solutions revenue was $785.2 million, up 52%.

Monthly recurring revenue was $95.1 million at the end of June, up 67% year over year “… as more merchants joined the platform and the number of retail locations using POS Pro increased,” Shopify said.

At June 30, Shopify had $7.76 billion in cash, cash equivalents and marketable securities, compared with $6.39 billion at Dec. 31, 2020.

Looking forward, Shopify did not provide specific earnings or revenue targets, though said its outlook for the remainder of 2021 “… is consistent with our assumptions in February.”

“We have seen an improvement in the overall economic environment through the first half of 2021, consumer spending beginning to rotate back to services and off-line retail, and e-commerce growing at a more normalized pace relative to 2020.

At last check, shares of Shopify were down 2.04% at $1,523.38.